Supply Chain and Risk Management: Lawyers Get Their Day and Regulation Beckons

The fourth theme that I suggested as part my “what’s next” presentation at ISM’s Risk Conference in Chicago this summer was “Lawyers get their day (but remember what Shakespeare said) and regulation beckons.”

Granted, lawyers profiting from risk and new regulations is a combination that few of us can get excited about. But it’s important to realize that there is certainly a “mixed” side to the vast amounts of information and insight we will generate from networks and platforms that exist between companies in the future – and that have already come into play with solutions such as SAP Supplier InfoNet.

Indeed, the sharing of supplier information between parties is not cut and dry. In the credit space, D&B and others have been able to distance themselves from legal risk by relying, in part, on information (e.g., credit references) that suppliers willingly provide. But what happens in a supplier network? Moreover:

  • What is truly “aggregate”?
  • How is information sharing impacted by global data privacy rules?
  • What happens if system-driven predictive decisions put vendors out of business based on their risk profile, which then leads to shifting spend to other suppliers?

I expect that as companies and suppliers share more and more information to mitigate risk, there will be legal challenges to companies, as well as to their technology partners in the sector based on the sharing of information among participants. We also believe that regulation may follow lawsuits in the US and EU (among other countries and regions).

We’re not excited about lawyers getting their day (and prefer the Shakespearean suggestion to dealing with attorneys in general). Yet it’s important to understand the ramifications around the sharing of new types of information between parties, both direct and indirect – and even third parties – without the full consent of everyone involved.

Discuss this:

Your email address will not be published. Required fields are marked *